Q2 2026 Claritev Corp Earnings Call

August 7, 2026

Speaker #1: Ladies and gentlemen, welcome to the Claritide Corporation Second Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: Ladies and gentlemen, welcome to the Claritev Corporation Second Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, just press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Please limit to one question and one follow-up. Also, please note that this call is being recorded. I would now like to turn the call over to Todd Friedman, Head of Investor Relations. Todd, you may begin.

Speaker #1: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, just press star followed by the number 1 on your telephone keypad.

Speaker #1: And if you would like to withdraw your question, press star 1 again. Please limit yourself to one question and one follow-up. Also, please note that this call is being recorded.

Speaker #1: I would now like to turn the call over to Todd Friedman, Head of Investor Relations. Todd, you may begin.

Speaker #2: Thank you, Mark. Good morning, everyone, and welcome to Clarivete's second quarter 2026 earnings call. Joining me today are Travis Dalton, President and Chief Executive Officer, and Doug Garis, Chief Financial Officer.

Todd Friedman: Thank you, Mark. Good morning, everyone, and welcome to Claritev's second quarter 2026 earnings call. Joining me today are Travis Dalton, President and Chief Executive Officer, and Doug Garis, Chief Financial Officer. During our call, we will refer to the supplemental slide deck that's available in the investors portion of our website, along with the second quarter 2026 earnings press release that we issued earlier this morning. Our remarks and responses to questions today will include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description in our annual report on Form 10-K and 10-Q and other documents that we've filed with the SEC.

Speaker #2: During our call, we will refer to the supplemental slide deck that is available in the Investors portion of our website, along with the second quarter 2026 earnings press release that we issued earlier this morning.

Speaker #2: Our remarks and responses to questions today will include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call.

Speaker #2: Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck, and a more complete description is available in our annual report on Form 10-K and 10-Q, and in other documents that we file with the SEC.

Speaker #2: We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Claritev's underlying operating results. An explanation of these non-GAAP measures and the reconciliations to their comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck.

Todd Friedman: We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Claritev's underlying operating results. An explanation of these non-GAAP measures and the reconciliations to their comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck. With that, I would now like to turn the call over to Travis.

Speaker #2: And with that, I would now like to turn the call over to Travis.

Speaker #3: Good morning. Thank you for joining us. We're pleased to announce another strong quarter for Claritide and continued progress on our turnaround journey. You are what your record says you are, and our results demonstrate that our strategy is working.

Travis Dalton: Good morning. Thank you for joining us. We're pleased to announce another strong quarter for Claritev and continued progress on our turnaround journey. You are what your record says you are, and our results demonstrate that our strategy is working, our execution is strengthening, growth is returning, and we are building forward momentum across the business. The hard work and discipline over the last two years of laying the foundation of clarity, alignment, focus resulted in the turn last year, which has positioned us to take advantage of the opportunities in front of us. At our Investor Day in March, we introduced 2026 as the year of the way up, which is a return to sustainable growth in our multi-year transformation. The H1 of the year has demonstrated that our strategy of driving horizontal solutions into vertical markets is working.

Speaker #3: Our execution is strengthening. Growth is returning, and we are building forward momentum across the business.

Speaker #2: The hard work and discipline over the last two years of laying the foundation of Claritide alignment and focus resulted in the turn last year, which has positioned us to take advantage of the opportunities in front of us.

Speaker #2: At our investor day in March, we introduced 2026 as the 'Year of the Way Up,' which is a return to sustainable growth in our multi-year transformation.

Speaker #2: The first half of the year has demonstrated that our strategy of driving horizontal solutions into vertical markets is working. In addition to focusing on our core client solutions and attacking new markets, we're building leaders in a culture of growth at the company.

Travis Dalton: In addition to focusing on our core client solutions and attacking new markets, we're building leaders and a culture of growth at the company. I'm most proud of the way our people have embraced change and new opportunities to impact healthcare. We also have made thoughtful and smart investments in our technology, platforms, data architecture, and talent over the last two years. Our technology modernization positions us to quickly adapt and harness the power of new tools and technology like AI to bring more value to clients much faster. The organizations that have the knowledge and align structurally to unleash the potential of AI will be winners going forward. Our greatest asset is the knowledge and industry acumen we possess versus the competition.

Speaker #2: I am most proud of the way our people have embraced change and new opportunities to impact healthcare. We have also made thoughtful and smart investments in our technology, platforms, data architecture, and talent over the last two years.

Speaker #2: Our technology modernization positions us to quickly adapt and harness the power of new tools and technologies, like AI, to bring more value to clients much faster.

Speaker #2: The organizations that have the knowledge and aligned structurally to unleash the potential of AI will be winners going forward. Our greatest asset is the knowledge and industry acumen we possess versus the competition.

Speaker #2: On today's call, I'll cover our strong second-quarter results, the macro healthcare environment that demonstrates the challenges we are so good at tackling for consumers of healthcare, and the continued progress and potential we see in AI.

Travis Dalton: On today's call, I'll cover our strong Q2 results, the macro healthcare environment that demonstrates the challenges we are so good at tackling for consumers of healthcare, the continued progress and potential we see in AI. Let me begin with our Q2 performance, which exceeded our expectations on nearly every key metric. Revenue and adjusted EBITDA both came in above plan. We had another great bookings quarter exceeding $70 million ACV for the H1 of 2026, and well on our way to achieve our $100 million full year stretch target. Just as important, we're seeing larger deal sizes, broader contribution from our entire sales team, improving win rates, and a healthy and growing pipeline. Doug will give some color on the conversion cycle from booking to revenue, but this quarter's business performance validates the foundation against the multi-year financial goals that we outlined at our Investor Day.

Speaker #2: Let me begin with our Q2 performance, which exceeded our expectations on nearly every key metric. Revenue and adjusted EBITDA both came in above plan.

Speaker #2: We had another great bookings quarter, exceeding $70 million ACV for the first half of 2026, and well on our way to achieve our $100 million full-year stretch target.

Speaker #2: Just as important, we are seeing larger deal sizes, broader contribution from our entire sales team, improving win rates, and a healthy and growing pipeline.

Speaker #2: Doug will give some color on the conversion cycle from booking to revenue, but this quarter's business performance validates the foundation against the multi-year financial goals that we outlined at our Investor Day.

Speaker #2: I do want to highlight one area that we stressed on our first quarter earnings call. Where we have ramped up our focus and brought in new leadership, and that's the third-party administrator or TPA business.

Travis Dalton: I do want to highlight one area that we stressed on our Q1 earnings call, where we have ramped up our focus and brought in new leadership, and that's the Third-Party Administrator, or TPA, business. The TPA vertical represented our largest contributor to Q2 bookings, with several seven-figure deals. Among them was Marpai, which selected our payment and revenue integrity solutions for both prepay and post-pay claims. We also expanded adoption of our network and advanced code editing solutions across the TPA market. Equally important is the breadth of our momentum with wins spanning large national TPAs, regional mid-market organizations, and technology-focused players. Our new segment leader, Dale White, has provided immediate energy to the business, and we expect this segment to contribute roughly 30% of our total new bookings this year, second only to our payer segment. We also see an expanded opportunity in Medicare Advantage.

Speaker #2: The TPA vertical represented our largest contributor second quarter bookings. With several seven-figure deals, among them was Marpi, which selected our payment and revenue integrity solutions for both prepay and postpay claims.

Speaker #2: We also expanded adoption of our network and advanced code editing solutions across the TPA market. Equally important is the breadth of our momentum with wins spanning large national TPAs, regional mid-market organizations, and technology-focused players.

Speaker #2: Our new segment leader, Dallas Script, has provided immediate energy to the business, and we expect this segment to contribute roughly 30% of our total new bookings this year, second only to our payer segment.

Speaker #2: We also see an expanded opportunity in Medicare Advantage. We recently signed a high six-figure ACV deal in New Logo in the quarter to build an MA network.

Travis Dalton: We recently signed a high six-figure ACV deal and new logo in the quarter to build an MA network. While not a significant revenue driver for us today, we believe it represents a meaningful long-term growth opportunity as plans increasingly seek solutions that improve payment accuracy, optimize networks, identify high cost trends, and enhance provider performance. This is an example of the diversification strategy we set in motion over the past two years, and we are beginning to see it translate into a broader, more durable growth profile. Taken together, our bookings momentum and revenue growth reinforce our confidence in the long-term strategy. Focus on our core solutions and faster innovation with our existing clients. Expand aggressively across new vertical markets with those solutions. Create new capabilities for launch that fit the cost reduction and transparency demand of the market.

Speaker #2: While not a significant revenue driver for us today, we believe it represents a meaningful long-term growth opportunity as plans increasingly seek solutions that improve payment accuracy, optimize networks, identify high-cost trends, and enhance provider performance.

Speaker #2: This is an example of the diversification strategy we set in motion over the past two years, and we're beginning to see it translate into a broader, more durable growth profile.

Speaker #2: Taken together, our bookings momentum and revenue growth reinforce our confidence in the long-term strategy. Focus on our core solutions and faster innovation with our existing clients, expand aggressively across new vertical markets with those solutions, create new capabilities for launch that fit the cost reduction and transparency demands of the market.

Speaker #2: This strategy is starting to yield sustainable growth momentum that will allow us the financial flexibility to invest, drive down our debt leverage over time, improve operating leverage, and unlock free cash flow to maximize long-term value.

Travis Dalton: This strategy is starting to yield sustainable growth momentum that will allow us the financial flexibility to invest, drive down our debt leverage over time, improve operating leverage, and unlock free cash flow to maximize long-term value. Next, I would like to highlight several macro trends that continue in healthcare and make our mission of affordability and transparency so important. First, medical cost trends continue to rise with medical inflation running between 8% and 10% annually, well above overall economic growth. Healthcare spending is almost 20% of the US GDP, creating significant pressure on employers, the government, and consumers. Claritev exists to help solve that problem, whether it is our network providing access to predictable care, transparency solutions bringing insights, PRI solutions tapping waste, or claims intelligence driving cost savings. Simply put, we make healthcare more affordable for consumers.

Speaker #2: Next, I'd like to highlight several macro trends that continue in healthcare, and make our mission of affordability and transparency so important. First, medical cost trends continue to rise with medical inflation running between 8 and 10 percent annually.

Speaker #2: Well above overall economic growth. Healthcare spending is almost 20% of US GDP, creating significant pressure on employers the government and consumers. Claritide exists to help solve that problem, whether it's our network providing access to predictable care, transparency solutions bringing insights, PRI solutions tackling waste, or claims intelligence driving cost savings.

Speaker #2: Simply put, we make healthcare more affordable for consumers. Second, self-funded plan enrollment remains stable and out-of-network claim volumes have remained in the mid 7% range over the last five years.

Travis Dalton: Second, self-funded plan enrollment remains stable and out-of-network claim volumes have remained in the mid 7% range over the last five years. Utilization is stable, but mix is shifting to higher cost areas such as emergency care, behavioral health, and specialty facilities, creating a durable demand environment for our network, payment integrity, and No Surprises Act solutions. Third, the regulatory complexity persists with NSA IDR changes that reduced federal funding for several programs. These changes and challenges can only be met by nimble, scaled, technology-enabled companies like Claritev. Affordability and transparency remain central priorities for the federal government, aligning closely with our core capabilities and strategies. Let me highlight a key area where government intervention is most measurable. 2022 introduction of the No Surprises Act and the independent dispute resolution process. The recently finalized IDR rules increase the operational and compliance requirements for both payers and providers.

Speaker #2: Utilization is stable, but mix is shifting to higher-cost areas such as emergency care, behavioral health, and specialty facilities, creating a durable demand environment for our Network, Payment Integrity, and No Surprises Act solutions.

Speaker #2: And third, the regulatory complexity persists with NSA, IDR changes, and a reduced federal funding for several programs. These changes and challenges can only be met by nimble, scaled technology-enabled companies like Claritide.

Speaker #2: Affordability and transparency remain central priorities for the federal government, aligning closely with our core capabilities and strategies. Let me highlight a key area where government intervention is most measurable.

Speaker #2: 2022 introduction of the No Surprises Act and the independent dispute resolution process. The recently finalized IDR rules increase the operational and compliance requirements for both payers and providers.

Speaker #2: As those requirements grow, our scale, technology, and expertise become even more valuable. No company has demonstrated a greater ability to manage NSA claims at scale than Claritide.

Travis Dalton: As those requirements grow, our scale, technology, and expertise become even more valuable. No company has demonstrated a greater ability to manage NSA claims at scale than Claritev. Our arbitration outcomes continue to outperform the industry by approximately eight percentage points, and we are seeing existing clients consolidate more of their NSA workflow onto our platform. The same dynamics are driving demand across our payment and revenue integrity portfolio. As healthcare organizations face increasing pressure to reduce costs, identify fraud, waste, and abuse, and improve payment accuracy, our solutions become increasingly strategic. We are proud that Everest Group recently recognized Claritev as a leader in payment integrity, and wins like the Marpai engagement underscore the growing momentum we continue to see across this portfolio. Finally, let me turn to AI.

Speaker #2: Our arbitration outcomes continue to outperform the industry, by approximately 8 percentage points. And we're seeing existing clients consolidate more of their NSA workflow onto our platform.

Speaker #2: The same dynamics are driving demand across our payment and revenue integrity portfolio. As healthcare organizations face increasing pressure to reduce costs, identify fraud, waste, and abuse, and improve payment accuracy, our solutions become increasingly strategic.

Speaker #2: We're proud that Everest Group recently recognized Claritide as a leader in payment integrity, and wins like the Marpi engagement underscore the growing momentum we continue to see across this portfolio.

Speaker #2: Finally, let me turn to AI. We view artificial intelligence as an accelerator of both growth and operating leverage, and an area where Claritide has built a meaningful competitive advantage.

Travis Dalton: We view artificial intelligence as an accelerator of both growth and operating leverage in an area where Claritev has built a meaningful competitive advantage. AI is only as valuable as the quality of the data behind it, the harness engineering engaged, the workflows it improves, and the trust users place in its recommendations. Those are areas where Claritev stands apart. Our multi-year digital transformation positioned us well before AI became today's headline. We have organized data, modern cloud-based workflow, and deep domain expertise that allows us to deploy AI responsibly and at scale. Today, we're already using AI across numerous models and production use cases to improve efficiency, accelerate decision-making, and deliver better outcomes for our clients. We have AI initiatives across all solutions and business functions, but I'll focus today on a few IDR examples where the need and the impact can be seen immediately.

Speaker #2: AI is only as valuable as the quality of the data behind it, the harness engineering engaged, the workflows it improves, and the trust users place in its recommendations.

Speaker #2: Those are areas where Claritide stands apart. Our multi-year digital transformation positioned us well before AI became today's headline. We have organized data, modern cloud-based workflow, and deep domain expertise that allows us to deploy AI responsibly, and at scale.

Speaker #2: Today, we're already using AI across numerous models and production use cases to improve efficiency, accelerate decision-making, and deliver better outcomes for our clients. We have AI initiatives across all solutions and business functions, but I'll focus today on a few IDR examples where the need and the impact can be seen immediately.

Speaker #2: If you listen to recent healthcare earnings calls or have read any of the current articles related to the NSA, you know that the system is being overwhelmed with volume that drives unnecessary administrative costs and delays.

Travis Dalton: If you listen to recent healthcare earnings calls or read any of the current articles related to NSA, you know that the system is being overwhelmed with volume that drives unnecessary administrative cost and delay. Payers on behalf of employers often have only a narrow window to validate claims, identify missing information, and screen out ineligible submissions. Our analysis indicates that nearly half of all IDR submissions are ineligible, highlighting a significant opportunity to use AI to improve efficiency and accelerate our clients' ability to respond quickly. This is where Claritev's combination of scale, data, and AI makes a meaningful difference. Over the past six months, we've launched AI-powered capabilities that automate provider data validation and ineligibility assessments, improving both speed and accuracy. We're also automating case creation for resubmission and enhancing predictive models that optimize pre-arbitration strategy.

Speaker #2: Payers, on behalf of employers, often have only a narrow window to validate claims, identify missing information, and screen out ineligible submissions. Our analysis indicates that nearly half of all IDR submissions are ineligible.

Speaker #2: Highlighting a significant opportunity to use AI to improve efficiency and accelerate our clients' ability to respond quickly, this is where Claritide's combination of scaled data and AI makes a meaningful difference.

Speaker #2: Over the past six months, we've launched AI-powered capabilities that automate provider data validation and ineligibility assessments, improving both speed and accuracy. We're also automating case creation for resubmission and enhancing predictive models that optimize pre-arbitration strategy.

Speaker #2: Together, these types of innovations reduce operating costs, improve outcomes, and resolve disputes earlier in the process, which is good for both parties. Finally, we operate in a highly competitive environment, with large and growing challenges facing our clients.

Travis Dalton: Together, these types of innovations reduce operating costs, improve outcomes, and resolve disputes earlier in the process, which is good for both parties. Finally, we operate in a highly competitive environment with large and growing challenges facing our clients. The need for more healthcare affordability and transparency has never been greater. Our strategy is delivering results, and we have the people, technology, data, and client relationships to capitalize on the opportunities to deliver right now and in the future. With that, let me turn the call over to Doug.

Speaker #2: The need for more healthcare affordability and transparency has never been greater. Our strategy is delivering results, and we have the people, technology, data, and client relationships capitalized on the opportunities to deliver right now and in the future.

Speaker #2: With that, let me turn the call over to Doug.

Speaker #3: Thank you, Travis, and good morning, everyone. In Q2, we outperformed virtually all of our internal finance metrics for revenue, adjusted EBITDA, cash flow, and bookings or ACV.

Doug Garis: Thank you, Travis, and good morning, everyone. In Q2, we outperformed virtually all of our internal financial metrics for revenue, adjusted EBITDA and cash flow, and bookings or ACV. As Travis indicated in his opening remarks, we are executing against the key objectives necessary, and we are on track to deliver or exceed the multi-year financial targets we outlined at our 26 March Investor Day. We are encouraged by our H1 results and the momentum we are carrying into the H2 of the year. Total revenue in the quarter was $257.5 million, up 6.6% year-over-year. This marks the fifth straight quarter of year-over-year revenue growth and was our highest revenue quarter in 15 quarters back to Q3 of 2022. Growth in Q2 came primarily from our largest business, where we saw noted performance in the claims intelligence service line, especially within our NSA business.

Speaker #3: As Travis indicated in his opening remarks, we are executing against a key objective necessary, and we are on track to deliver or exceed the multi-year financial targets we outlined at our March 26 investor day.

Speaker #3: We are encouraged by our first half results and the momentum we are carrying into the back half of the year. Total revenue in the quarter was $257.5 million up 6.6% year over year.

Speaker #3: This marks the fifth straight quarter of year-over-year revenue growth, and was our highest revenue quarter in 15 quarters back to Q3 of '22. Growth in Q2 came primarily from our largest business, where we saw noted performance in the claims intelligence service line.

Speaker #3: Especially within our NSA business. Claims intelligence was up close to 14% in Q2, and our total PSA revenue of $220 million was at its highest level in nearly four years.

Doug Garis: Claims intelligence was up close to 14% in Q2, and our total PSA revenue of $220 million was at its highest level in nearly four years. Additionally, our network and payment and revenue integrity service lines performed at or slightly above internal expectations in the quarter. Network revenues would have been positive year over year if you exclude the $5.4 million of one-time revenue from Q2 last year. On a comparable basis, excluding the one-time revenue from last year, our total growth in Q2 is nearly 9%. Q2 adjusted EBITDA was $155.8 million, our strongest performance in 13 quarters on an absolute dollar basis and represented 60.5% of revenue. Margin was in line with our expectations for the quarter. I'd like to take a moment to note the strength of our cash flow metrics this quarter because they were meaningful.

Speaker #3: Additionally, our Network and Payment and Revenue Integrity service lines performed at, or slightly above, internal expectations in the quarter. Network revenues would have been positive year-over-year if you exclude the $5.4 million of one-time revenue from Q2 last year.

Speaker #3: On a comparable basis, excluding the one-time revenue from last year, our total growth in Q2 was nearly 9%. Q2 adjusted EBITDA was $155.8 million—our strongest performance in 13 quarters on an absolute dollar basis—and represented 60.5% of revenue.

Speaker #3: Margin was in line with our expectations for the quarter. I'd like to take a moment to note the strength of our cash flow metrics this quarter, because they were meaningful.

Speaker #3: We generated $93 million of operating cash flow, up 51% versus the prior year; $89.5 million of unlevered free cash flow, up 24% versus the prior year; and we generated $54.6 million of levered free cash flow, up 49% versus the prior year.

Doug Garis: We generated $93 million of operating cash flow, up 51% versus prior year, $89.5 million of unlevered free cash flow, up 24% versus prior year, and we generated $54.6 million of levered free cash flow, up 49% versus prior year. With respect to levered free cash flow, this was our highest quarterly performance in 15 quarters. We also did a great job of managing working capital and improved the pacing of our working capital cash conversion metrics, DTO and DSO, by greater than five days. As a reminder, since the debt refinancing transaction concluded in January 2025, we expect Q1 and Q3 to be cash consumption quarters, and Q2 to Q4 to be cash generation quarters in the near to midterm. Our strong Q2 cash flow performance gives us confidence to invest with the elevated pace of investment required to fund our multi-year transformation and to support our growth initiatives.

Speaker #3: With respect to levered free cash flow, this was our highest quarterly performance in 15 quarters. We also did a great job of managing working capital and improved the pacing of our working capital cash conversion metrics, DPO and DSO, by greater than five days.

Speaker #3: As a reminder, since the debt refinancing transaction concluded in January '25, we expect Q1 and Q3 to be cash consumption quarters, and Q2 to Q4 to be cash generation quarters in the near to midterm.

Speaker #3: Our strong Q2 cash flow performance gives us confidence to invest with the elevated pace of investment required to fund our multi-year transformation, and to support our growth initiatives.

Speaker #3: Our diversification strategy continues to be supported by strong sales momentum, highlighted by another record bookings quarter. Travis provided some stats about strong bookings. With $30 million of ACV booked in Q2, we have already surpassed the $67 million we booked for the full year in '25.

Doug Garis: Our diversification strategy continues to be supported by strong sales momentum, highlighted by another record bookings quarter. Travis provided some stats about strong bookings. With $30 million of ACV booked in Q2, we have already surpassed the $67 million we booked for the full year in 2025. We plan on achieving the $100 million bookings aspiration we announced earlier this year. Our H1 2026 bookings were up 150%, and we exited June with greater than $300 million of active pipeline, up 50% on a comparable basis, with greater than three times coverage. As we have said before, bookings are not linear, but given improvements to our processes and insights into our pipeline, we feel highly confident in our ability to deliver at least 50% ACV bookings growth for the full year. In Q2, bookings reflected a balanced mix of expansion between existing clients and new client acquisition.

Speaker #3: We plan on achieving the 100 million bookings aspiration we announced earlier this year. Our first half 26 bookings were up 150%, and we exited June with greater than 300 million dollars of active pipeline up 50% on a comparable basis, with greater than three times coverage.

Speaker #3: As we have said before, bookings are not linear. But given improvements to our processes, and insights into our pipeline, we feel highly confident in our ability to deliver at least 50% ACV bookings growth for the full year.

Speaker #3: In Q2, bookings reflected a balanced mix of expansion between existing clients and new client acquisition. Cross-sell and upsell activity accounted for approximately 75% of bookings, while 25% came from five net new client logos, which included several from the provider and public sector verticals.

Doug Garis: Cross-sell and up-sell activity accounted for approximately 75% of bookings, while 25% came from five net new client logos, which included several from the provider and public sector verticals. A few additional highlights on Q2 bookings performance. Pipeline growth remains exceptionally strong alongside continued improvements in lead qualification and sales execution. So far in 2026, we closed 16 deals with greater than $1 million of ACV, up 25% versus last year. Through the H1 of the year, our average deal size has grown more than 300% on an absolute dollar basis. Beyond deal size, most of our other key sales metrics continue to trend favorably. Sales cycle times from lead gen to deal close continue to shorten, and our win rates continue to improve. Our momentum is building.

Speaker #3: A few additional highlights on Q2 bookings performance. Pipeline growth remains exceptionally strong, alongside continued improvements in lead qualification and sales execution. So far in '26, we closed 16 deals with greater than 1 million of ACV, up 25% versus last year.

Speaker #3: Through the first half of the year, our average deal size has grown more than 300% on an absolute dollar basis. Beyond deal size, most of our other key sales metrics continue to trend favorably.

Speaker #3: Sales cycle times from lead generation to deal close continue to shorten, and our win rates continue to improve. Our momentum is building. Our performance this quarter is reflective of the aggressive sales strategy and realignment to segments we announced at the end of last year.

Doug Garis: Our performance this quarter is reflective of the aggressive sales strategy and realignment to segments we announced at the end of last year. In our supplemental deck you'll find on our website, you'll see a shift in some of our claims and charges trends. In Q2, claims volume grew 11% sequentially and 3% versus prior year, reversing recent trends. There are two primary drivers here that speak about the diversification of our business and why we balance these metrics instead of relying on just one. First, we have now largely lapped the residual impact of a single client issue from several years ago, whose volumes declined increasingly over the last few years. Future quarters starting in Q3 will make for a better comparison to the run rate of our core business as we go forward.

Speaker #3: In our supplemental deck—which you'll find on our website—you'll see a shift in some of our claims and charges trends. In Q2, claims volume grew 11% sequentially and 3% versus the prior year, reversing recent trends.

Speaker #3: There are two primary drivers here that speak to the diversification of our business, and why we balance these metrics instead of relying on just one.

Speaker #3: First, we have now largely lapped the residual impact of a single client issue from several years ago, whose volumes have declined increasingly over the last few years.

Speaker #3: Future quarter starting in Q3 will make for a better comparison to the run rate of our core business as we go forward. Second and more notable, we saw a significant increase in the volume of NSA claims we process, driven by a recent client win.

Doug Garis: Second, more notable, we saw a significant increase in the volume of NSA claims we processed, driven by a recent client win. Because NSA claims typically cover a broader set of services, gross NSA claims volume stepped up meaningfully, while total charges per claim and revenue per claim moved lower sequentially. This is simply a product mix shift, not pricing, nor margin pressure. Total T-Save revenue dollars grew 8% sequentially and 10% in the quarter versus prior year, and the net dollar contribution is clearly accretive. While we do not give a guide to claims volumes, we note that this mix dynamic could persist in H2, which could keep volumes elevated and revenue per claims averages closer to our Q2 exit rate in the near future. Turning to guidance.

Speaker #3: Because NSA claims typically cover a broader set of services, gross NSA claims volume stepped up meaningfully, while total charges per claim and revenue per claim moved lower sequentially.

Speaker #3: This is simply a product mix shift, not pricing nor margin pressure. Total PSA revenue dollars grew 8% sequentially and 10% in the quarter versus prior year, and the net dollar contribution is clearly accretive.

Speaker #3: While we do not give a guide to claims volumes, we note that this mixed dynamic could persist in the second half, which could keep volumes elevated and revenue per claim averages closer to our Q2 exit rate in the near future.

Speaker #3: Turning to guidance, on the strength of Q2, we are raising our revenue guide two full percentage points to a new range, up 1 billion to 1.02 billion, reflecting 4 to 6% growth, and marking a return to greater than 1 billion of annual revenue which we elapsed eclipsed in 2022.

Doug Garis: On the strength of Q2, we are raising our revenue guide two full percentage points to a new range of $1 billion to $1.02 billion, reflecting 4% to 6% growth and marking a return to greater than $1 billion of annual revenue, which we last eclipsed in 2022. As you review your H2 model, I'll note Q2 included a small amount of volume-based revenue that was originally modeled in Q1. Therefore, for the quarterly revenue cadence, we suggest modeling Q3 revenue flat sequentially, largely consistent with current analyst models. We are raising our full year adjusted EBITDA guide to $610 to 620 million, with margins of approximately 61%. As we stated last quarter, we will continue to invest increasingly in sales, marketing, and operations to support the growth in ACV.

Speaker #3: As you review your second half model, I'll note Q2 included a small amount of volume-based revenue that was originally modeled in Q1. Therefore, for the quarterly revenue cadence, we suggest modeling Q3 revenue flat sequentially, largely consistent with current analyst models.

Speaker #3: We are raising our full year adjusted EBITDA guide to 610 to 620 million, with margins of approximately 61%. As we stated last quarter, we will continue to invest increasingly in sales marketing and operations to support the growth in ACV.

Speaker #3: New bookings take, on average, two to four quarters to convert to revenue, and then another four quarters to achieve fully annualized revenue contribution. This means we will continue to invest now for new and expansion revenue drivers that largely begin contributing to our top and bottom line growth in '27 and '28.

Doug Garis: New bookings take on average two to four quarters to convert to revenue, then another four quarters to achieve fully annualized revenue contribution, which means we will continue to invest now for new and expansion revenue drivers that largely begin contributing to our top and bottom line growth in 2027 and 2028. We are not changing our guidance for total capital spend at $160 to 170 million in 2026. We are raising our free cash flow guide by $5 million to a new range of $5 to 15 million. In 2026, we expect to deliver substantial operating, unlevered, and levered free cash flow growth, with adjusted cash conversion normalizing to pre-2025 levels of greater than 50% by the end of this year. Finally, we remain committed to our capital allocation plan on a multi-year basis.

Speaker #3: We are not changing our guidance for total capital spend at $160 to $170 million in 2026. We are raising our free cash flow guide by $5 million, to a new range of $5 to $15 million.

Speaker #3: In '26, we expect to deliver substantial operating, unlevered, and levered free cash flow growth, with adjusted cash conversion normalizing to pre-'25 levels of greater than 50% by the end of this year.

Speaker #3: Finally, we remain committed to our capital allocation plan on a multi-year basis. We plan to primarily invest in our business to drive organic growth, and drive absolute dollar earnings and free cash flow yield.

Doug Garis: We plan to primarily invest in our business to drive organic growth and drive absolute $ earnings and free cash flow yield. All of this aligns with our guiding principles to diversify and accelerate expanding our solutions, verticals, and channels to drive growth while also de-leveraging and de-risking our business to enhance cash flow and operating agility. With that, I'll turn the call back over to Travis for some final remarks before taking your questions.

Speaker #3: All of this aligns with our guiding principles to diversify and accelerate expanding our solutions verticals and channels to drive growth, while also deleveraging and de-risking our business to enhance cash flow and operating agility.

Speaker #3: With that, I'll turn the call back over to Travis for some final remarks before taking your questions.

Speaker #1: Well, thanks, Doug. I've got one quick closing comment, and then we'll open the line for questions. Our leadership team is fully formed, and it's finding its rhythm.

Travis Dalton: Thanks, Doug. I've got one quick closing comment. We'll open the line to questions. Our leadership team is fully formed and it's finding its rhythm. Transforming a 45-year-old business is not a small task, but the momentum at Claritev is real, and you can feel it every day. Change is a constant and continuous force, and we're building the organization to adapt. Our strategy is working. Our alignment internally has allowed us to focus on our clients, and we're executing with greater speed and discipline as we attack new areas to ensure long-term sustainable growth. I also want to give a quick shout-out to Ryan Fox on his recent victory at The Open Championship. When we relaunched our brand last year, we made a decision to align ourselves with brand ambassadors who do more than wear our logo. They represent the values we aspire to as a company.

Speaker #1: Transforming a 45-year-old business is not a small task. But the momentum and clarity is real, and you can feel it every day. Change is a constant and continuous force, and we're building the organization to adapt.

Speaker #1: Our strategy is working. Our internal alignment has allowed us to focus on our clients, and we're executing with greater speed and discipline as we attack new areas to ensure long-term, sustainable growth.

Speaker #1: I also want to give a quick shout-out to Ryan Fox on his recent victory at The Open Championship. When we relaunched our brand last year, we made a decision to align ourselves with brand ambassadors who do more than wear a logo.

Speaker #1: They represent the value we aspire to values we aspire to as a company. Ryan is not just an amazing golfer, but he's a tremendous human being, and all of us at Claritive Claritive could not have been prouder to support him and cheer him along the way.

Travis Dalton: Ryan is not just an amazing golfer, he's a tremendous human being, and all of us at Claritev could not have been prouder to support him and cheer him along the way. It was a cool moment to watch him sink that last birdie putt and see the Claritev name. With that, I'll turn to the operator for questions. Thanks.

Speaker #1: It was a cool moment to watch him sink that last birdie putt and see the Claritev win. With that, I'll turn the call to the operator for questions.

Speaker #1: Thanks.

Speaker #2: We will now begin the question and answer session. If you would like to ask a question at this time, just press star followed by the number one on your telephone keypad.

Operator: We will now begin the question and answer session. If you would like to ask a question at this time, just press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Please limit to one question and one follow-up. Thank you. Your first question comes from the line of Daniel Grosslight with Citi. Daniel, please go ahead.

Speaker #2: And if you would like to withdraw your question, press star one again. And please limit to one question and one follow-up. Thank you. And your first question comes from the line of Daniel Grosslight with City.

Speaker #2: Daniel, please go ahead.

Speaker #4: Hi, guys. Thanks for taking the question. Congrats on reaching what seems to be a nice inflection point. I know it was a lot of hard work to get here.

Daniel Grosslight: Hi, guys. Thanks for taking the question. Congrats on reaching what seems to be a nice inflection point. I know it was a lot of hard work to get here. I wanted to focus on the nice improvement in PSA volume you saw this quarter. I know you noted it was largely driven by NSA claim growth. I'm wondering how much of that was due to maybe a bolus in Q2 just getting through the system, and how much is more structural? I'm trying to think through the volume dynamic in the back half of this year.

Speaker #4: I wanted to focus on the nice improvement in PSAV volume you saw this quarter. I know you noted it was largely driven by NSA claim growth.

Speaker #4: I'm wondering how much of that was due to maybe a bolus in Q2, just getting through the system, and how much is more structural?

Speaker #4: I'm trying to think through the volume dynamic in the back half of this year.

Speaker #3: Yeah, thank you, Daniel. Thanks for the kudos and happy to take that one. So when you look at our first half volume, we modeled low single-digit volume on the full year.

Travis Dalton: Yeah. Thank you, Daniel. Thanks for the kudos, and happy to take that one. When you look at our H1 volume, we modeled low single-digit volume on the full year. We think there was approximately maybe $45 to 60 million of savings that kind of slipped into Q2, which is a $few million of revenue. We're actually highly encouraged by the volume environment heading into the H2 of the year. As the new pronouncements of NSA come about, it's going to be really hard to tell why we've taken a little bit more of a modest view of volumes in our base modeling for the H2. Some of the structural changes to NSA actually have us very well positioned, but we basically modeled a low single-digit volume decline on the full year.

Speaker #3: We think there was approximately, maybe, $45 to $60 million of savings that kind of slipped into Q2, which is a few million of revenue.

Speaker #3: We're actually highly encouraged by the volume environment heading into the second half of the year. As the new pronouncements of NSA come about, it's going to be really hard to tell why we've taken a little bit more of a modest view of volumes in our base modeling for the second half.

Speaker #3: Some of the structural changes to NSA actually have us very well positioned. But we basically modeled a low single-digit volume decline on the full year.

Speaker #3: And if you look at the sequential progression of volume, we think the Q2 exit rate is exit rates are pretty fair baseline for us heading throughout the year.

Travis Dalton: If you look at the sequential progression of volume, we think the Q2 exit rates are a pretty fair baseline for us heading throughout the year.

Speaker #4: Got it. Okay. As a follow-up, more of a math question. If I hold 3Q revenue constant relative to 2Q and I plug in kind of the midpoint of guidance for the full year, that implies a step down from 3Q to 4Q of about seven-ish million dollars.

Daniel Grosslight: Got it. Okay. As a follow-up, more of a math question. If I hold Q3 revenue constant relative to Q2, and I plug in kind of the midpoint of guidance for the full year, that implies a step down from Q3 to Q4 of about $7-ish million. Is that just conservatism in the guide and you really expect to be kind of closer to the high end of the revenue guide, or even above it? I'm just trying to square why should we see a sequential step down in Q4 implied by the guide?

Speaker #4: Is that just conservatism in the guide, and you really expect to be kind of closer to the high end of revenue guide, the revenue guide, or even above it?

Speaker #4: I'm just trying to square why we should we see a sequential step down in 4Q implied by the guide.

Speaker #3: Yep. No, that's a great question. So what I would say is, we're managing between the base and the high end of the range. And if you look at the base case, that implies a 2H of about 508 million of total revenue, which year over year is up 3% sequentially is up 1%.

Travis Dalton: Yes. No, that's a great question. What I would say is we're managing between the base and the high end of the range. If you look at the base case, that implies a H2 of about $508 million of total revenue, which year-over-year is up 3%, sequentially is up 1%. If you take the base of 1.01 on the year, between the base and the high end of the range, you kind of have a sequential step-up of 1% to 3%, and then a year-over-year progression of about 3% to 5%. Again, largely dependent on claims volume that kind of flow through the PSA business. We tend to plan the business a little bit more conservatively so we can manage free cash flow. That's how I would think about your model for Q3 and Q4 exit rates.

Speaker #3: So if you kind of take the base of 1.01 on the year, between the base and the high end of the range, you kind of have a sequential step up of 1 to 3 1 to 3%.

Speaker #3: And then a year-over-year progression of about 3 to 5%. Again, largely dependent on claims volume and kind of flow through the PSA business. But we tend to plan the business a little bit more conservatively so we can manage free cash flow.

Speaker #3: But that's how I would think about your model for Q3 and Q4 exit rate.

Speaker #4: Got it. Thank you.

Daniel Grosslight: Got it. Thank you.

Speaker #2: Your next question comes from the line of Richard Close with Canaccord Genuity. Richard, please go ahead.

Operator: Your next question comes from the line of Richard Close with Canaccord Genuity. Richard, please go ahead.

Speaker #5: Excuse me. Yes, thanks for the question. Congratulations on the performance here. Doug, I think you mentioned this a little bit in your prepared remarks, but can you just remind us on new booking wins?

Richard Close: Excuse me. Yes, thanks for the question. Congratulations on the performance here. Doug, I think you mentioned this a little bit in your prepared remarks, can you just remind us on new booking wins, like just the time to implement and trigger revenue recognition, has there been any changes there? Just trying to plan out when these new wins come online.

Speaker #5: Just the time to implement and trigger revenue recognition, has there been any changes there? Just trying to plan out when these new wins come online.

Speaker #3: Yep. No, that's a great question. Thanks. And thanks for the question. So our average booking, when we have a new booking, it takes anywhere from about 2 to 4 quarters to turn into the first dollar of revenue.

Doug Garis: Yep. That's a great question. Thanks for the question. Our average booking, when we have a new booking, it takes anywhere from about 2 to 4 quarters to turn into the first dollar of revenue, then it takes about 4 quarters for the revenue to annualize. Our ACV bookings metric is not indifferent to like a software ARR metric. It operates in principle the same. We had a larger NSA win earlier in the year that took about a quarter and a half to turn on, which is why we had a little bit of over-performance in Q2. On the round, when you look at our claims intelligence business, especially our payment revenue integrity business, those tend to be closer to 2 to maybe 3 quarters. Whereas, for instance, we had a large win

Speaker #3: And then it takes about four quarters for the revenue to annualize. And so, our ACV bookings metric is not indifferent to a software ARR metric.

Speaker #3: It operates in principle the same. We had a larger NSA win earlier in the year. That took about a quarter and a half to turn on, which is why we had a little bit of overperformance in Q2.

Speaker #3: But on the round, when you look at our Claims Intelligence business, and especially our Payment Revenue Integrity business, those tend to be closer to two to maybe three quarters. Whereas, for instance, we had a large win—a large public sector win—with the World Trade Center and the federal space, which takes anywhere from three to four quarters to turn into first dollar of revenue.

Doug Garis: On the round, when you look at our claims intelligence business, especially our payment revenue integrity business, those tend to be closer to 2 to maybe 3 quarters. Whereas, for instance, we had a large win. A large public sector win with the World Trade Center in the federal space, which takes anywhere from 3 to 4 quarters to turn into first dollar of revenue. 2 to 4 quarters is kind of our midpoint of how we plan for ACV to revenue conversion. If you recall in the annual guide that we provided, we had about a 6% to 7% step-up in revenue, ACV to revenue conversion at the beginning of the year. I think it's fair that we probably are seeing a point higher of revenue conversion this year, which is preempting our beat and raise heading into the H2 of the year.

Travis Dalton: A large public sector win with the World Trade Center in the federal space, which takes anywhere from 3 to 4 quarters to turn into first dollar of revenue. 2 to 4 quarters is kind of our midpoint of how we plan for ACV to revenue conversion. If you recall in the annual guide that we provided, we had about a 6% to 7% step-up in revenue, ACV to revenue conversion at the beginning of the year. I think it's fair that we probably are seeing a point higher of revenue conversion this year, which is preempting our beat and raise heading into the H2 of the year.

Speaker #3: But two to four quarters is kind of our midpoint of how we plan for ACV to revenue conversion. And if you recall, in the annual guide that we provided, we had about a 6% to 7% step-up in revenue ACV to revenue conversion at the beginning of the year.

Speaker #3: I think it's fair that we probably are seeing a point higher of revenue conversion this year, which is preempting our beat-and-raise heading into the second half of the year.

Speaker #5: Okay, that's helpful. And then just on the digital transformation, maybe an update there—is it going as expected? Are you able to accelerate it at all?

Richard Close: Okay, that's helpful. Just on the digital transformation, maybe an update there. Is it going as expected? Are you able to accelerate it at all? Just any thoughts in terms of how that's tracking?

Speaker #5: Just any thoughts in terms of how that's tracking?

Speaker #3: Yeah, Richard, just Travis. Yeah, look, I think we, as I said, my opening remarks, I think we made a smart decision two years ago to start that transformation program to start aggressively modernizing the company.

Travis Dalton: Yeah, Richard, this is Travis. Look, as I said in my opening remarks, I think we made a smart decision 2 years ago to start that transformation program, to start aggressively modernizing the company. The point I would make is that we had investments to make in core systems, we had investments to make in digital transformation, and we had investments to make for growth. I think the team's done, frankly, a tremendous job of what I call threading the needle of bringing the company up to modern standards, then investing in our growth thesis by opening new markets, talent, people. Our digital transformation remains on track. It remains core and central to the company. We've been able to move most of our applications to cloud-based environments, what was underpinning a lot of the digital work we were doing was really around data architecture and infrastructure.

Speaker #3: The point I would make is that we had investments to make in core systems, investments to make in digital transformation, and investments to make for growth.

Speaker #3: And I think the team's done frankly a tremendous job of what I call threading the needle of bringing the company up to modern standards.

Speaker #3: And then, investing in our growth thesis by opening new markets, attracting talent, and adding people. Our digital transformation remains on track. It remains core and central to the company.

Speaker #3: We've been able to move most of our applications to cloud-based environments. And what was underpinning a lot of the digital work we were doing was really around data architecture and infrastructure.

Speaker #3: So I think it's positioned us really well, not just to run the company in its current form, but also to take full advantage of AI models and capability, and forward-progressing technologies.

Travis Dalton: I think it's positioned us really well, not just to run the company in its current form, but also to take full advantage of AI models and capability and forward-progressive technology. I would say we're very pleased with progress, teams executing, and we're starting to see real value from those models that are emerging.

Speaker #3: So I would say we're very pleased with the progress. The team's executing, and we're starting to see real value from those models that are emerging. Yeah, anything, Doug?

Travis Dalton: Yeah. I would just say AI has been the focal point, obviously, for a lot of organizations. Our digital transformation enables us to be a winner in AI. We have dozens of use cases and models in place. Look, I mean, last quarter, I think we said it, more than half of our code now is generated by AI. I think the expectation is going forward, as we fully modernize our over 400 applications, we'll have approximately the same number of humans doing four to eight times more work. We're pretty well-positioned in our digital transformation. I always joke around with our Chief Digital Officer and ask him to go faster, but I think we're well on track to our multi-year transformation in the last update that we gave at Investor Day in March.

Speaker #6: And I would just say, AI has been the focal point, obviously, for a lot of organizations. Our digital transformation enables us to be a winner in AI.

Speaker #6: We have dozens of use cases and models in place. And look, I mean, last quarter—I think we said it—more than half of our code now is generated by AI.

Speaker #6: And I think the expectation is, going forward, as we fully modernize our over 400 applications, we'll have approximately the same number of humans doing four to eight times more work.

Speaker #6: And so we're pretty well positioned in our digital transformation. I always joke around with our Chief Digital Officer and ask him to go faster.

Speaker #6: But I think we're well on track to our multi-year transformation in the last update that we gave at Investor Day in March.

Speaker #5: Okay. Thank you.

Richard Close: Okay, thank you.

Speaker #2: Your next question comes from the line of Stan Bernstein with Wells Fargo. Stan, please go ahead.

Operator: Your next question comes from the line of Stan Berenshteyn with Wells Fargo. Stan, please go ahead.

Speaker #7: Hi, good morning. Thanks for taking my questions. Maybe first, on bookings—obviously, you've today executed against most of the book that you anticipated.

Stan Berenshteyn: Hi. Good morning. Thanks for taking my questions. Maybe first on bookings. Obviously, you know you've year-to-date executed against most of the book that you anticipated. There's maybe $26 million remaining. How have bookings been converting into revenue versus your expectations at the start of the year?

Speaker #7: There's maybe 26 million remaining. Do you see a path to get to over 100 million here? And how have bookings been converting into revenue versus your expectations at the start of the year?

Speaker #3: Yeah. Thanks, Stan. So we are going to deliver an accessible $100 million of bookings this year. We have delivered $74 million of bookings through the first half of the year.

Doug Garis: Yeah. Thanks, Stan. We are going to deliver in excess of $100 million of bookings this year. We've delivered $74 million of bookings through the H1 of the year, we're already ahead of our pace from last year. What I had said earlier is I think we get about an additional point of ACV to revenue conversion on a larger win we had in the NSA space that has been progressing well, a very large payer win that we had earlier in the year that turned on at or maybe a little bit ahead of schedule. I think part of the uptick in our guide is attributable to the ACV conversion, but on average, the two to four quarters for ACV ramp is still a very good paradigm.

Speaker #3: So we're already ahead of our pace from last year. And what I had said earlier, I think we got about an additional point of ACV to revenue conversion on a larger win we had in the NSA space that has been progressing well.

Speaker #3: A very large payer win that we had earlier in the year—that's turned on at, or maybe a little bit ahead of, schedule. So I think part of the uptick in our guide is attributable to the ACV conversion.

Speaker #3: But on average, the two to four quarters for ACV ramp is still a very good—it's still a very good paradigm.

Speaker #7: Got it. And then maybe it's a little bit early to start talking about 2027, but as you look at your sales pipeline, do you see any differences in the mix of opportunities versus what you've executed against in 2026?

Stan Berenshteyn: Got it. Maybe it's a little bit early to start talking about 2027, but as you look at your sales pipeline, do you see any differences in the mix of opportunities versus what you've executed against in 2026? Thank you.

Speaker #7: Thank you.

Speaker #3: Yeah. So I would so we felt comfortable coming out and giving a little bit more color into our actual funnel. So we have north of 300 million dollars of active pipeline.

Doug Garis: Yeah. We felt comfortable coming out and giving a little bit more color into our actual funnel. We have north of $300 million of active pipeline, and about a third of that is within our new verticals. Some of them, especially in the public sector, are a little bit longer lead time, but just like the World Trade Center, it's business we would've never been on before. Our realignment under our chief growth officer, 2 segments was really smart. Our pipeline and funnel and our bookings progression has been pretty steady at 70% to 75% of upsell and cross-sell. This notion that there's not growth in our core business is simply not true. When you look at our payer space, about 80% of our revenue, our TPA space is a little less than 20%.

Speaker #3: And about a third of that is within our new verticals. And so some of them, especially the public sector, are a little bit longer lead time.

Speaker #3: But just like the World Trade Center, it's business we would have never bid on before. And so our realignment under our chief growth officer to segments was really smart.

Speaker #3: And then our pipeline and funnel and our bookings progression has been pretty steady at 70 to 75 percent of upsell and cross-sell. And so this notion that there's not growth in our core business is simply not true.

Speaker #3: When you look at when you look at our payer space, that 80% of our revenue, our TPA space is a little less than 20.

Speaker #3: There is significant white space left to go. And we're actively hitting the market, especially in the TPA space, thinking about pricing and packaging more strategically.

Doug Garis: There is significant white space left to go, we're actively hitting the market, especially in the TPA space, thinking about pricing and packaging more strategically. We want to be the single vendor to a lot of large customers. We've seen great progress and momentum thinking about our sales motion differently, we did close five new logos. We have 11 this year. We did 30 last year, it's goodness all around. We're keeping the core business the focus because that's where most of our uplift in scale is going to come from over the next few years.

Speaker #3: We want to be the single vendor to a lot of large customers. We've seen great progress and momentum thinking about our sales motion differently.

Speaker #3: But we did close five new logos. We have 11 this year. We did 30 last year. So it's goodness all around. But we're keeping the core business the focus, because that's where most of our uplift and scale is going to come from over the next few years.

Speaker #3: I don't know if you got anything. Yeah, I would just add a little—just a tiny bit of color commentary to that. I mean, I think Doug hit it, but our strategy, which we set out really a couple of years ago and are now executing, is to put together vertical market strategies around products that can work across those markets without massive customization or investments needed for each vertical.

Stan Berenshteyn: I don't know if you got anything.

Travis Dalton: Yeah, I would just add a little, just tiny bit of color commentary to that. I think Doug hit it, our strategy we set out really a couple of years ago that we're executing is to put together vertical market strategies against products that could work across those without massive customization or investments needed for each vertical market. That's been something we've been focused on. We're now getting to it, we're starting to execute against that. It's not just calling on the same customers over and over. We expanded aggressively in the TPA market. We think MA represents a real advantage for us as we or opportunity as we build out our sales apparatus. This quarter was great. We had TPA deals, we had two public sector deals.

Speaker #3: So that's been something we've been focused on. We're now getting to it. And we're starting to execute against that. So it's not just calling on the same customers over and over.

Speaker #3: We expanded aggressively in the TPA market. We think MA represents a real advantage for us as we or opportunity as we build out our sales apparatus this quarter was great.

Speaker #3: We had two we had TPA deals. We had two public sector deals. We had two services deals. And we international continues to be a business that we think could yield results for us.

Travis Dalton: We had two services deals, international continues to be a business that we think could yield results for us. The totality of it is healthier. I think it'll take time for us in those new markets for it to become a significant portion of our ongoing revenue performance. I'm very, very happy with what looks like early returns and durability of the business.

Speaker #3: So the totality of it is healthier. I think it'll take time for us in those new markets for it to become a significant portion of our ongoing revenue performance.

Speaker #3: But I'm very, very happy with what looks like early returns and durability of the business.

Speaker #7: I appreciate the caller. Thank you.

Stan Berenshteyn: Appreciate the color. Thank you.

Speaker #2: Your next question comes from the line of Jason Casorla with Guggenheim. Jason, please go ahead.

Operator: Your next question comes from the line of Jason Cassorla with Guggenheim. Jason, please go ahead.

Speaker #5: Great, thanks. And good morning, and congrats on the quarter. Maybe just on the NSA revenue upside, can you help a little bit in terms of the mix of drivers?

Jason Cassorla: Great. Thanks, good morning, and congrats on the quarter. Maybe just on the NSA revenue upside, can you help a little bit in terms of the mix of drivers? It sounds like it was predominantly from the win earlier this year. I'm just curious if you're seeing that funnel widen, just given the backdrop. Maybe following up on that, can you help in terms of how to think about the puts and takes for NSA moving forward in that business? Do you think that this year could be a tough comp for you or how sticky is this NSA revenue in your view? Just any thoughts there would be great.

Speaker #5: It sounds like it was predominantly from the win earlier this year. But I'm just curious if you're seeing that funnel widen just given the backdrop.

Speaker #5: And then maybe following up on that, can you help in terms of how to think about the puts and takes for NSA moving forward and that business?

Speaker #5: Do you think that this year could be a tough comp for you, or how sticky is this NSA revenue in your view? Just any thoughts there would be great.

Speaker #3: Yeah, thanks for the question, Jason. So, the uptick in NSA was primarily due to one client. And it's not just NSA, it's surprise bill.

Travis Dalton: Yeah. Thanks. Thanks for the question, Jason. The uptick in NSA was primarily due to one client. It's not just NSA, it's surprise bill. Surprise bill both includes the NSA as well as state surprise bill. There's 27 different versions of state surprise bill, which is yet another reason why we continue to be the market leader. We actually recently published a report on our performance on our website, and we can share those details in follow-ups. We're performing 8 points better than the next closest comparer. I think we're the fourth largest provider aside from folks who do it in-source. We really like our position in NSA. The recent final rulings and the rollout of those, it will be interesting to see how volume unfolds in the H2.

Speaker #3: Surprise bill both include the NSA as well as state surprise bill, which is a there's 27 different versions of state surprise bill, which is yet another reason why we continue to be the market leader.

Speaker #3: We actually recently published a report on our performance on our website, and we can share those details and follow-ups. We're performing 8 points better than the next closest compare.

Speaker #3: And I think we're the fourth largest provider aside from folks who do it in-source. And so we really like our position in NSA. The recent final rulings and the rollout of those it will be interesting to see how volume unfolds in the second half.

Speaker #3: I think we probably need a quarter or two to see whether there's a material volume uptake but just as a point of clarification, the cost per dispute went from 115 dollars to 15.

Travis Dalton: I think we probably need a quarter or two to see whether there's a material volume uptake. Just as a point of clarification, the cost per dispute went from $115 to $15. We think that we're well-positioned with our large clients who rely on us, and we think not just the surprise bill product, which is now our second largest category. It's our second largest offering. We have the full end-to-end set of solutions. Keep in mind, greater than 85% to 90% of the time when we get a surprise bill claim, it doesn't go through the IDR process. Everything funnels in through our network. Oftentimes, we're able to get to an immediate clearing price that's acceptable. Then we go through a prepay and post-pay negotiation process. All of these, in total, I think, are a net positive for the business.

Speaker #3: We think that we're well positioned with our large clients who rely on us. And we think not just the surprise bill product, which is now our second largest category our second largest offering, we have the full end-to-end set of solutions.

Speaker #3: And keep in mind, greater than 85 to 90 percent of the time, when we get a surprise bill claim, it doesn't go through the IDR process.

Speaker #3: So everything funnels in through our network. Oftentimes, we're able to get to an immediate clearing price that's acceptable. And then we go through we go through a prepay and postpay negotiation process.

Speaker #3: All of these in total I think are a net positive for the business. But it's when you kind of final when the final, I would say, implementation of the rules happen in Q3 and Q4, I think it probably bodes net positive for us from a volume perspective.

Travis Dalton: It's when the final, I would say, implementation of the rules happen in Q3 and Q4, I think it probably bodes net positive for us from a volume perspective. I think we're waiting to see some of that volume come through in the back half of the year.

Speaker #3: But I think we're waiting to see some of that volume come through in the back half of the year.

Speaker #5: Got it. Okay, thanks. Very helpful. And then maybe just wanted to ask about the AI initiatives that are identifying more savings per claim. I guess I'm curious—is there a way to help sort of quantify how incremental those savings are developing against your normal blocking and tackling?

Jason Cassorla: Got it. Okay, thanks. Very helpful. Then maybe just wanted to ask about the AI initiatives that are identifying more savings per claim. I guess, curious, is there a way to help sort of quantify how incremental those savings are developing against sort of your normal blocking and tackling? Then maybe a way to frame what the remaining savings opportunity there looks like. Are you in inning 2 or 3 of this kind of AI-related savings potential? Just any thoughts around that would be helpful. Thanks.

Speaker #5: And then maybe a way to frame what the remaining savings opportunity there looks like. Are you in any two or three of these kinds of AI-related savings potential?

Speaker #5: Just any thoughts around that would be helpful. Thanks.

Speaker #3: Yeah. So at our investor day, we announced our pro pricer product, which is identified over a billion dollars of additional savings. So the uplift from us using AI to make our stuff work better is real.

Travis Dalton: Yeah. At our Investor Day, we announced our ProPricer product, which has identified over $1 billion of additional savings. The uplift from us using AI to make our stuff work better is real. It's baked into the way the existing R&D we put into the business. With respect to kind of additional savings, some of this stuff is competitive, we probably wouldn't give further insight. I will tell you that, historically, we spend about 12% to 14% of our capital on R&D, and about half of that was historically devoted to making our stuff work better. We've been investing in AI for a very long time. Notable last year was ProPricer, which was an AI-based initiative to identify and deliver more savings, which I think we came out and said it's worth about $1 billion in our core business of savings.

Speaker #3: And it's baked into our the way the existing R&D we put into the business. With respect to kind of additional savings, some of the stuff is competitive.

Speaker #3: We probably wouldn't give further insight. But I will tell you that historically, we spent about 12 to 14 percent of our capital on R&D.

Speaker #3: And about half of that was historically devoted to making our stuff work better. And so we've been investing in AI for a very long time.

Speaker #3: But notable last year was Pro Pricer, which was an AI-based initiative to identify and deliver more savings, which I think we came out and said is worth about $1 billion in our core business of savings.

Speaker #5: Okay. Thank you.

Jason Cassorla: Okay. Thank you.

Speaker #2: Again, if you would like to ask a question, just press star followed by the number one on your telephone keypad. Our next question comes from the line of Jessica Tasson with Piper Sandler.

Operator: Again, if you would like to ask a question, just press star followed by the number one on your telephone keypad. Our next question comes from the line of Jessica Tassan with Piper Sandler. Jessica, please go ahead.

Speaker #2: Jessica, please go ahead.

Speaker #6: Hi guys. Thank you very much for taking the question and congrats on the results. I'm wondering if you can just help us understand the variance versus consensus across each of your three revenue segments.

Jessica Tassan: Hi, guys. Thank you very much for taking the question, and congrats on the results. I am wondering if you can just help us understand the variance versus consensus across each of your three revenue segments. Just drivers and any comments. Network, it looks like, was a $2.7 million beat. Analytics, $12.6 million beat. Payments, $2.6 million miss. Appreciate the comments on flat sequential revenue in Q3, but just helpful if you could provide detail on the performance versus consensus across each of those three revenue lines. Thanks.

Speaker #6: So just drivers and any comments network, it looks like was a 2.7 million dollar beat, analytics 12.6 million beat, and then payments 2.6 million miss.

Speaker #6: Appreciate the comments on flat sequential revenue in 3Q, but just helpful if you could provide detail on the performance versus consensus, kind of across each of those three revenue lines.

Speaker #6: Thanks.

Speaker #3: Yes. Yep. Sure. Thanks, Jess. And thanks for the question. So, on payment revenue integrity, the miss is timing. We still expect that business to be up versus prior year.

Doug Garis: Yes. Sure. Thanks, Jess, and thanks for the question. On payment revenue integrity, the miss is timing. We still expect that business to be up versus prior year. The network, we mentioned in the prepared remarks, both network and payment revenue integrity performed in line with our expectations. If we need to go a little bit further in detail in the post-call, we can. Network is going to be down high single digits this year because we had approximately $18.5 million of one-time revenue from last year. Our claims intelligence obviously being up roughly 14% in the quarter was a highlight, and that is where our data insight, financial negotiation, and NSA products land. Part of the beat this quarter and the raise on the full year is due to the performance in NSA. I would expect the trend in claims intelligence to continue.

Speaker #3: But network, we mentioned in the prepared remarks, both network and payment revenue integrity performed in line with our expectations. And if we need to go a little bit further in detail in the post-call, we can.

Speaker #3: Network is going to be down high single digits this year because we have approximately 18 and a half million of one-time revenue from last year.

Speaker #3: Our Claims Intelligence, obviously being up roughly 14 percent in the quarter, was a highlight. And that's where our Data, EyeSight, Financial Negotiation, and NSA products land.

Speaker #3: And part of this quarter and the raise for the full year was due to the performance in NSA. I would expect the trend in claims intelligence to continue.

Speaker #3: And just as a quick highlight to the first half of the year, we broke approximately 25 million of ACD in the payment revenue integrity space.

Doug Garis: Just as a quick highlight to H1 of the year, we booked approximately $25 million of ACV in the payment revenue integrity space. When we announced several of the large deals, including the Marpai deals, these are all in deals that a majority of the revenue is associated with payment revenue integrity. It was very nice to be included in the leader category in the recent Everest Group report. We are finding great success in selling our payment revenue integrity solutions, both pre- and post-pay, as a bundled offering. The medium- to long-term prospects of the payment revenue integrity business, especially with payers focused on fraud, waste, and abuse, is a specific area of investment and growth for us in the medium to long term.

Speaker #3: So when we announced several of the large deals, including the Marpai deals, these are all in deals that a majority of the revenue is associated with payment revenue integrity.

Speaker #3: It was very nice to be included in the leader category in the recent EVERS report. We're finding great success in selling our payment revenue integrity solutions, both pre and post-pay, as a bundled offering.

Speaker #3: And so the medium to long-term prospects of the payment revenue integrity business, especially with payers focused on fraud, waste, and abuse, is a specific area of investment and growth for us in the medium to long term.

Speaker #3: But we do expect the payment revenue integrity business to be a growth business this year when we snap the chalk on the full year.

Doug Garis: We do expect the payment revenue integrity business to be a growth business this year when we snap the chalk on the full year.

Speaker #6: Thank you, that's so helpful. So just one quick clarification: $25 million of the $37 million ACD booked was payment and rev integrity. And then my follow-up question is, can you maybe discuss, of your top three customers, how many use Claritive for IDR help?

Jessica Tassan: Thank you. That's so helpful. Just one quick clarification. $25 of the $37 million ACV booked was payment and rev integrity. My follow-up question is just, can you maybe discuss, of your top 3 customers, how many use Claritev for IDR help? Just, you mentioned eligibility determinations, but I guess, what is Claritev doing in that process from the time the out-of-network service is rendered? Would appreciate just any color on the suite of products that address the NSA and the IDR process. Thank you.

Speaker #6: And then just you mentioned eligibility determinations, but I guess what is Claritive doing in that process from the time the out-of-network service is rendered?

Speaker #6: And would appreciate just any color on kind of the suite of products that address the NSA and the IDR process. Thank you.

Speaker #3: Yeah. Great. So several of our top 10 customers use our services explicitly. And as I mentioned, we are the largest independent provider of surprise bill in NSA.

Travis Dalton: Great. Several of our top 10 customers use our services explicitly. As I mentioned, we are the largest independent provider of surprise bill and NSA, outside of the large payers and carriers who do the services themselves. We think we do it much better, and the recent pub data from CMS confirms that. Most often, when we get an NSA claim and it comes to our NPI core database, we can resolve the claim with our host of solutions, whether it's a network rate, which we have 1.4 million providers. We have a financial negotiations team of hundreds of folks who have decades of relationships with providers, we are often able to assign value through the QPA process so that the disputes do not go to the IDR process.

Speaker #3: Outside of the large payers and carriers that do the services themselves, we think we do it much better. And the recent PUFF data from CMS confirms that.

Speaker #3: And so most often, when we get an NSA claim and it comes through our MPI core database, we can resolve the claim with our host of solutions, whether it's a network rate, which we have 1.4 million providers.

Speaker #3: We have a financial negotiation team with hundreds of folks. We have decades of relationships with providers. And then we're often able to assign value through the QPA process.

Speaker #3: So, that's that—the disputes do not go to the IDR process. When a dispute does go to the IDR process, which is a fraction of the time, that's where our win rates stand apart.

Doug Garis: When a dispute does go to the IDR process, which is a fraction of the time, that's where our win rates stand apart, and they're exceptional. This is the value of the service that several of our large customers rely on us. It's better, faster, cheaper, more economical, and the most important point is it gives the best outcome for employers and consumers of healthcare, which is our core strategy with transparency and affordability.

Speaker #3: And they're exceptional. But this is the value of the service that several of our large customers rely on us. It's better, faster, cheaper, more economical, and most important, point is it gives the best outcome for employers and consumers of healthcare, which is our core strategy with transparency and affordability.

Speaker #6: Thank you.

Jessica Tassan: Thank you.

Speaker #2: There's no further question at this time. I will now turn the call back over to the company for closing remarks.

Operator: There's no further question at this time. I will now turn the call back over to the company for closing remarks.

Speaker #4: Yeah. Thanks, everybody, for your time. We appreciate it. Like we said, we're pleased with our results and the positive momentum. And thanks for your time.

Doug Garis: Yeah. Thanks everybody for your time. We appreciate it. Like we said, we're pleased with our results and the positive momentum. Thanks for your time. Appreciate it.

Speaker #3: Appreciate it.

Operator: This concludes today's conference call. You may now disconnect.

Q2 2026 Claritev Corp Earnings Call

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